What Is Keith Kaplan’s Retirement Calculator?

Keith Kaplan recently released a presentation to introduce us to a Retirement Calculator that he says saved him from being “the worst investor in America.”

He says that since he started using it, it has also changed the way many other people invest and according to a study he conducted, it could have added an average of $97,347 to the accounts of many others.

I sat through the presentation to find out what that was all about and in this article, I have summarized it into the key talking points I gleaned from it to help you understand how the retirement calculator works.

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What is Keith Kaplan’s Retirement Calculator? (The Pitch)

Keith Kaplan starts the presentation by telling us that he used to be terrible at trading because he closed his positions wrongly; he either left money on the table by closing positions that went on to make money or he held on to losing trades for too long thus accruing unnecessary loss.

Keith Kaplan's Retirement Calculator

He says that this is a challenge even for professional money managers – something called the disposition effect. He even quotes studies that have proven it…

“It’s called the disposition effect.

Psychologist Daniel Kahneman even won the Nobel Prize in Economics after he proved that we all suffer from it.

You see, researchers from MIT and the University of Chicago recently published a shocking study on professional money managers.

They studied 783 portfolios over a period of 16 years.

In total, they looked at millions of trades made by professionals.

The study concluded, ‘while there is clear evidence of skill in buying, selling decisions underperform substantially.’

That’s right…

Professional stock-pickers can figure out what to buy… but they don’t know when to sell.”

He goes on to say that he overcame this problem by using a calculator that uses data to make the decisions for him. It helps him time his trades better to maximize the profit potential and uses something called Volatility Quotient.

“I only did it because the calculator helped me time the trades.

This is only possible because of that number I mentioned earlier…

The VQ.

You see, VQ stands for volatility quotient…

And it helps remove the noise from stock moves.”

What is Volatility Quotient?

Volatility Quotient, according to Keith, is an indicator that shows you how much room you can give stock to time your exits better. It tells you how much uncertainty or noise there is in your stocks.

Here is the formula for calculating it that Keith displays on the screen:

Keith Kaplan's Retirement Calculator

How does VQ work for him? He explains it as follows…

“Each stock has a normal range of behavior, if you will… a normal range of volatility that’s based on their historical behavior.

That’s what VQ measures.

For example, Johnson & Johnson has a VQ of about 16%…

Which means if it drops 16%, that’s normal volatility.

You should not panic.

Tesla on the other hand has a much higher VQ of 52%.

So even if it drops 30%, it would be normal volatility…

And you should not panic.

That’s how this number can help you filter out the noise.”

So what this does is allow Keith to hold on to a stock if it drops within its normal range rather than selling it off and leaving money on the table. Conversely, it also allows him to close a position involving a stock if the drop is greater than its normal range because that’s when he determines that it is plummeting.

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How to Use Keith Kaplan’s Retirement Calculator Online

Keith calculates the VQ using the formula we saw before but he has programmed it so that you can do it online merely by entering the symbol of the stock who’s VQ you want to find out on his website.

To calculate the VQ of any stock online, you have to join TradeStops.

“I’m talking about the VQ for commodities, funds…and of course all 51,254 stocks.

You can just go online and type any ticker symbol…

And it will give you the VQ…

So in this case you can see we typed AAPL… and got the VQ for Apple.”

Keith Kaplan's Retirement Calculator

Beyond calculating the VQ of the stock, TradeStops also enables you to track the VQ of your holdings by linking your portfolio to the software. It also enables you to monitor the ‘health status’ of a stock. The ‘health status’ is an indicator that lets you know whether a stock is in ‘buy mode’ or ‘sell mode’ depending on its volatility.

TradeStops also enables you to determine the number of shares you should buy using a feature called “position size calculator.”

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Who is Keith Kaplan?

Keith Kaplan is the CEO of TradeSmith, a boutique investment research firm that gives individual investors access to market analytical tools.

Keith has always been good with computers. He even taught himself how to program while in high school and built his computer. He has a degree in computer information systems and spent 20 years as a software architect and director of engineering at some big tech firms.

Although he was into trading while he was still working, he got into the world of newsletter editing when a financial research firm hired him as a software architect. It hired him to develop a portfolio tracker for its customers and ever since he has been writing about investing.

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What is TradeStops?

TradeStops is a subscription service that gives you access to Keith Kaplan’s Retirement Calculator online as we saw earlier. To summarize, here is what you get when you join TradeStops:

  • A portfolio tracker that keeps you up to date with how your positions are faring.
  • Access to the Position Size Calculator
  • Access to the health status that shows you whether a stock is in buy or sell mode.
  • Access to video tutorials in the quick start program.
  • Access to newsletters from publishing firms affiliated with TradeSmith. For example, you can access newsletters provided by The Oxford Club and Banyan Hill Publishing because they are corporate affiliates.
  • Customized automatic alerts that track the VQ of a stock you want to monitor.

You also get a special report titled Next Generation FAANGs: 4 Tech Stocks Getting the Green Light in 2021 that covers the tech boom and the stocks that Keith thinks have massive upside potential.

How much do you pay to join TradeStops?

An annual subscription costs $79 if you join via the presentation.

Does TradeStops have a Refund Policy?

It has a 60-day money-back guarantee.

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Closing Remarks on Keith Kaplan’s Retirement Calculator

Keith Kaplan’s Retirement Calculator is a tool that enables him to time his investments to avoid sticking with losing trades for too long or exiting gainers prematurely thus leaving money on the table. You can gain access to the tool by subscribing to TradeStops.

After going through the presentation, I realized this is not the first time he is talking about using VQ, the health status, or the position size calculator. He has touted them before in the Portfolio X-Ray.

Although it all sounds logical and straightforward that using the volatility quotient will streamline your ability to trade, you should realize that timing the market (even using volatility calculators) does not exempt you from risk. You should accept that you will still lose money even when you use the indicator.

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